The Log.svc is responsible for gathering statistics for the Personalization module. Provided you disable the module you will get rid of the exception.
I tested the same on a local project and did not manage to reproduce this error no matter what I tried. Can you please specify a scenario I can follow in order to get the same result you do?
Regarding your specific questions - the service is not located in an actual .svc file. It is part of the Telerik.Sitefinity.Services.Statistics.Impl assembly and is called via a registered URL. Therefore absence of a physical file and/or read/write permissions to such cannot be considered as reasons for this 404 status code error.
Ivan D. Dimitrov
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